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On November 16th, the House of Representatives passed a tax reform bill, and within the next week, it is expected the Senate will vote on their version of the bill. There are major differences between the House and Senate versions, and to become law, both houses of Congress must come together to develop and pass a single piece of legislation. As they stand, these bills both provide large, long-term tax breaks for corporations and the very wealthy, with smaller, short term cuts for middle class individuals. Should Congress succeed in passing tax reform legislation in either bill’s current form, there are considerable implications for our communities.

Individual Mandate

The Senate tax bill includes an elimination of the ACA’s individual mandate. The individual mandate helps stabilize the health insurance market. Without the penalty for not having insurance, experts believe the cost of insurance will skyrocket, leading to a loss of coverage for millions of people. This rise in insurance premiums will likely cancel out any tax breaks for the middle class and will be coupled with an increase in subsidies, increasing federal cost.

Medicare

The tax bill will increase the federal deficit by $1.5 trillion and trigger mandatory offsets, likely to include cuts to Medicare. The Congressional Budget Office estimates Medicare would be cut $25 billion each year for a decade. These cuts will result in loss of coverage and services.

Health Expense Deduction

The House bill includes an elimination of the deduction for health expenses that are over 10% of household income, exacerbating the cost of healthcare for the extremely ill.

Both bills double the standard deduction for single and married individuals, which is positive for many individuals and families. This increase in the standard deduction reduces the amount of income on which individuals or couples must pay federal taxes, but is countered by the elimination of the Personal Exemption, which also allows for untaxed income. Both bills eliminate the deduction for state and local income and sales tax (SALT). The House bill retains part of the property tax deduction, capping it at $10K, while the Senate repeals it entirely. Both bills increase the child tax credit for each child and for other dependents. In the Senate version of the bill, unfortunately many beneficial tax cuts for the middle class expire in 10 years.

On May 16th, CCUIH Board President Sonya Tetnowksi, CEO of IHCSCV testified during the Committee of Appropriations AIAN Public Witness Hearing. She underscored the vital role California Urban Indian Health Programs (UIHPs) play in the Indian Health Service health care delivery system. We thank Sonya for her leadership and representing the UIHP American Indian patient population.

An excerpt from Sonya Tetnowski’s testimony: “Federal support remains critical to ensure the delivery of essential health services both on and off reservation land…. We ask that while you are considering appropriations for FY 2018 consider an increase for I/T/U system of care, (“I- Indian Health Service, T- Tribal Health providers (Tribal 638), and U- Urban Indian Health Providers) with a formulary that takes into account the entire AI/AN population and steps to create network capacity and infrastructure to meet our health needs wherever we are.”

California is home to 10 Urban Indian Health Organizations, representing nearly one-third of all Title V programs nationwide. According to the 2010 Census, nearly 90% of American Indian Alaska Native (AIAN) in California live in urban areas, compared to 78% nationwide. Because the majority of the Urban Indian population in California is unable to access their Tribes for health and wellness services, UIHPs are a key lifeline to the population.

Today Congressman Valadao introduced H.R. 1842 The Indian Health Service Health Professions Tax Fairness Act of 2015, whichamends the tax code to provide healthcare professionals who receive student loan repayments from the Indian Health Service the same tax free status enjoyed by the National Health Service Corps.

H.R. 1842 would help recruit and retain health professionals to serve in underserved American Indian communities throughout the nation. Our Urban Indian communities in California could greatly benefit from this legislation, particularly those in the Fresno American Indian Health Projects and the Bakersfield American Indian Health Project service areas.

This bill is extremely bipartisan with support from Republicans and Democrats in the House, Senate, and language from the Executive Branch.

Key Facts

Allows funds from the Indian Health Service Professions Scholarships Program to be excluded from gross income under Section 117(c)(2) of Internal Revenue Code and allows participants in the IHS Loan Repayment Program to exclude from gross income loan amounts forgiven by IHS under Section108(f)(4) of IRC.

Legislation would bring the Indian Health Service in line with National Health Service Corps and the Armed Services Health Professions scholarships which are currently tax exempt.

Currently, there are over 1,550 health professional vacancies in the Indian Health Service. Making IHS loan repayment tax exempt would free up $5.71 million, funding an additional 115 health professionals.

Each Indian Health Service medical professional in the program will bring in significant added revenue through 3rd party billings.

On April 14, 2015, the U.S. Senate passed a two (2) year renewal for the Special Diabetes Program for Indians (SDPI). The renewal was contained in a larger bill called: The Medicare Access and CHIP Reauthorization Act of 2015 (HR 2). CCUIH is grateful to the National Indian Health Board for the work that they continue to do to make this program sustainable and effective for the long-term.

SDPI is one of many programs in this legislation. Other provisions included a 2-year authorization of the Children Health Insurance Program (CHIP) and a permanent adjustment of the Medicare physician payment formula. You can read a summary of the legislation here.

SDPI provides critical programs that are helping our Tribal communities address complications and burdens of Type 2 diabetes. The newly-passed legislation funds SDPI at $150 million per year, which is the same as the current level. This program will now expire on September 30, 2017.

Congress established the Special Diabetes Program for Indians (SDPI) in 1997 as part of the Balanced Budget Act to address the growing epidemic of diabetes in American Indian and Alaska Native communities. SDPI currently provides grants for 404 programs in 34 states – including California.

At a rate of 2.8 times the national average, American Indians and Alaska Natives have the highest prevalence of diabetes. In some AIAN communities, over 50% of adults have been diagnosed with type 2 diabetes.

SDPI is changing troubling statistics like this, with marked improvements in average blood sugar levels, reductions in the incidence of cardiovascular disease, prevention and weight management programs for our youth, and a significant increase in the promotion of healthy lifestyle behaviors. This success is due to the nature of this grant program to allow communities to design and implement diabetes interventions that address locally identified community priorities.

SDPI in California

Nearly 9% of California’s population, or 2.5 million people (CDC, 2010), have diagnosed diabetes, many of which suffer from serious diabetes related complications or conditions. The rate of diabetes for Urban Indians is 78% higher compared to the general population of California.

About CCUIH

The California Consortium for Urban Indian Health (CCUIH) is an alliance of direct service Urban Indian health organizations that supports health promotion and access for American Indians living in cities throughout California.